Kern County mounts defense of oil train shipments

Link to article: https://stillwaterassociates.com/kern-county-mounts-defense-oil-train-shipments/

August 24, 2014

by Tony Bizjak and Curtis Tate, The Sacramento Bee

KERN COUNTY – In Sacramento and the Bay Area, recent plans to run trains laden with crude oil through downtowns to coastal refineries have prompted fears and protests this summer. But, here in the southern San Joaquin Valley, where oil has served as economic lifeblood for more than a century, similar plans are getting mainly cheers.

Projects planned for both locales involve bringing milelong trains daily into the state through high-hazard mountain passes, over rivers that feed farms and through the hearts of cities. Both likely will carry the now-infamous Bakken crude oil from North Dakota, which has been involved in several spectacular rail explosions.

But while many in California view oil as unsustainable and undesirable, in Kern, oil is still king. South Valley leaders and oil industry representatives are quick to point out that almost all of California’s 33 million cars and trucks still need gasoline, refined from oil, every day, much of it from Kern.

“We’re the biggest producer, you know that?” said Independent Oil Producers’ Agency Executive Vice President Les Clark, who shares a cluttered office with wood models of oil derricks, as well as paintings and photos of derricks. “The rest are peanuts.”

The Kern County Board of Supervisors is expected to approve what should be the state’s largest crude oil rail terminal in September. Another large crude-by-rail terminal is already under construction west of here, and will begin operating this fall. Together, the Alon USA refinery rail terminal in Bakersfield and the nearby Plains All American facility could receive three 100-car crude oil trains a day.

That’s considerably more oil than Valero Refining Co. proposes to ship by rail to its Benicia refinery in the Bay Area, a plan that would bring two 50-car oil trains through Sacramento every day starting next year. The environmental report for that project has generated more than a hundred written and oral comments from the public, many in support, but many against.

In contrast, the environmental review for the Alon refinery project in Bakersfield prompted just 22 comments. Only two of them were from local residents challenging the project. Duane Henning, who identified himself as a parent of a Bakersfield High student, called the proposal ridiculous. The tracks are a few yards from the high school. “There is no way these Bakken shale oil trains should be allowed into the community,” he wrote.

A letter supportive of the project, from John Spaulding of the Building Trades Council, expressed a different kind of urgency. Spaulding pointed out that a new rail terminal on-site will allow Alon to reopen its shuttered Bakersfield refinery, which once employed hundreds of people.

“It is imperative that Kern County stay relevant in the oil and gas markets that we have, in many ways, helped to shape,” Spaulding said.

Crude shipments by rail have dramatically increased through cities across the country in the last few years, prompted by new hydraulic fracking of cheaper oil in North Dakota and other states, where there are few pipelines to refineries. This increase has been accompanied by a call for greater safety measures. Responding to several recent high-profile derailments and explosions, including one that killed 47 residents of a Canadian town last year, federal officials are considering requiring stronger train tanker cars to carry crude oil, more sophisticated guidance technology on trains to reduce the chance of human error, and better training and equipment for emergency responders in case of an accident.

California so far has hosted only a few all-oil trains. But state officials say California may be receiving up to 23 percent of its oil from other states by rail in the next few years, and they too are concerned about derailment, spill and fire risks.

Kern leaders say they are well aware of those concerns and are working with Alon and the BNSF Railway on safety steps. “Our environmental impact report did not downplay or ignore accidents with oil trains,” Planning Director Lorelai Oviatt said. “We believe business should invest in protecting the public.”

The Kern environmental review, however, drew a critical response from a notable entity. Berkeley city officials sent Kern a letter contending its review is inadequate because it doesn’t do enough to assess danger to cities on rail lines. Berkeley is not on the rail line that would bring the crude to the Alon refinery.

The letter rankles Oviatt, who points out that Kern County is expanding its energy production from renewable sources – solar, wind and biomass – while trying to maintain its strength in the oil industry. “I’d just like to point out that we have more renewable energy than the city of Berkeley,” she said. “So I am not so sure that the city of Berkeley shouldn’t turn their attention inward…to see what they’re doing about climate change.”

Until California makes the transition to alternative fuels for its residents and their cars, the production and transport of oil will play a major role in the state, she said. “Stopping everything is not realistic. And that’s not what we’re going to do down here.”

Wendy Park, an attorney for Earthjustice, a San Francisco-based environmental group, agrees with Berkeley’s contention that Kern hasn’t done a full study of the health and safety impacts of the Bakersfield projects, including how other communities in California might be affected. Trains could arrive in Bakersfield via Southern California, or through Sacramento and the Central Valley. Her argument is similar to one Sacramento area officials have made about the potential negative impacts the Valero crude-by-rail project in Benicia could have on cities along the rail line, should there be a derailment and explosion.

“We really need to step back and look into those (issues) before we go full speed ahead with these projects,” Park said.

That hasn’t been happening in all cases in California. While the Alon terminal in Bakersfield and Valero’s Benicia project are undergoing full public environmental reviews, three crude-by-rail facilities known as transfer stations have not undergone such scrutiny.

The Plains All American crude-by-rail transfer station, about 25 miles southwest of Bakersfield, will open later this year without any formal environmental review. The site already had been zoned as an oil facility prior to the current plan to bring trains there. A crude oil transfer station at McClellan Business Park in Sacramento and another in the Bay Area city of Richmond are operating without environmental review because both previously had permits for other types of train transfers.

Earthjustice, on behalf of four environmental groups, sued the Bay Area Air Quality Management District and Kinder Morgan in March to require an environmental review at the Richmond facility.

Houston-based Plains officials declined a request by The Sacramento Bee for an interview and tour of their Kern County terminal site, where trains are expected to unload oil to pipelines that run to coastal refineries. In an emailed statement, Plains spokesman Brad Leone said the $100 million Kern project will allow California to reduce reliance on foreign oil. “Crude by rail provides a solution to bring North American crude oil to regions in the United States that were previously very dependent on foreign oil imports.”

Officials at Dallas-based Alon did not respond to calls and email requests for comment about their plans in Kern County.

For Kern County, the Alon and Plains projects represent an irony. America’s top producing oil county – where the hills remain thick with pumping oil rigs – is about to become a major importer of other states’ oil. Kern’s massive oil fields have matured and are producing slightly less in recent years. The train shipments represent an opportunity for Kern companies to evolve with the industry and for the area to maintain its status as California’s oil epicenter.

Dave Hackett, president of Stillwater Associates, an energy consulting firm in Irvine, said that Bakersfield is a strategic location for California refiners, because a network of pipelines fan out to refineries in Southern California and the Bay Area. The Plains terminal in outer Kern County would offload trainloads of oil from Canada, North Dakota and other Western states and transfer it to the pipeline network.

Even as Alon and Plains lay plans to bring trains of crude into the Central Valley, some in Kern are talking about a possible new wrinkle. A large, but deep and tightly packed formation of shale, called the Monterey Shale, sits below Kern and numerous other California counties. Exploratory drilling has begun. Industry officials say it will require fracking, and possibly some other creative technologies, to extract the oil underneath.

“That’s supposedly the gold mine out there,” Clark of the Independent Oil Producers’ Agency said. “That’d give us a shot in the arm.”

Categories: News